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December 14th, 2011 WW Staff | NikeLeaks Cables: Africa and Middle East
 

Morocco: GENUINE EFFORTS TO CURB COUNTERFEIT IN MOROCCO?

     
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Reference ID: 07CASABLANCA57
Created: 2007-03-20 14:19
Released: 2011-08-30 01:44
Classification: CONFIDENTIAL
Origin: Consulate Casablanca

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STATE FOR NEA/MAG AND NEA/PI

E.O. 12958: DECL: 02/26/2017
TAGS: ECON, EFIN, KDEM, MO
SUBJECT: GENUINE EFFORTS TO CURB COUNTERFEIT IN MOROCCO?

REF: 06 CASABLANCA 883

Classified By: Principal Officer Doug Greene for reasons 1.4 (B) AND
(D)

1. (C) SUMMARY: Difficulties encountered over the past year by the
Consumer and Brand Protection Group (CBPG), a working group formed by
several multi-national consumer goods companies to address the
prevalence of counterfeit merchandise in Morocco, highlights the
challenge of practically implementing Morocco's IPR commitments.
After less than a year in existence, the group has decided it must
become an official, government-backed entity in order to make
headway. The group has identified a number of Moroccan laws that
need to be amended, and believes that customs must assume a more
proactive role in seizing fake goods. While Morocco has a decent
track record on IPR and anti-counterfeit measures, the CBPG's
experience suggests that continued efforts are warranted. END
SUMMARY.

------------------------------
BRAND PROTECTION GROUP FIZZLES
------------------------------

2. (U) Multinational consumer goods companies active in Morocco
estimate that they lose about USD 200 million per year as a result of
counterfeiting. The problem led the companies, which include Proctor
and Gamble, Bic and NIKE, to come together in mid-2006 to form the
Consumer and Brand Protection Group (CBPG). Initial strategies
considered by the group include having an auditor do an economic
impact study to estimate losses; launching awareness campaigns to
help people differentiate between fake and real goods; and educating
consumers about the health risks associated with certain counterfeit
products.

3. (SBU) Since the group identified these priorities last year,
however, little has been accomplished. Without formal, legal status,
the group has been unable to win other converts to its cause, or to
convince larger business organizations, such as The General
Confederation of Enterprises of Morocco (CGEM), to lend their support
to the anti-counterfeit push. In addition, hopes that the government
would move to create a promised national anti-counterfeit task force
have not been realized.

4. (SBU) The group hopes that by achieving legal status, it can
attract companies that until now have declined to join a purely
private sector initiative. At present, the few companies involved do
not have sufficient resources to bankroll a coordinated
anti-counterfeit effort, nor do they feel they should without
government buy-in.

-------------------------------------------
LINK COUNTERFEIT TO TERRORISM TO ENGAGE GOM
-------------------------------------------

5. (C) The CBPG had originally hoped that arguments highlighting lost
jobs and tax revenue (estimated to be as much as USD 100 million)
would convince the government to step up anti-counterfeiting efforts.
Ismail Chajai of P and G now believes that the best way to get the
GOM to take action is to emphasize the links between organized crime,
terrorism and counterfeit. If statistics on the economy and lost
jobs do not motivate the GOM, Chajai believes safety and security
will. Information uncovered by P and G investigators has already led
him to suspect a possible connection between terrorism networks and
the savvy and well-financed counterfeiters of P and G's Always brand
maxi-pads.

-------------------------------------
TRADEMARK, CUSTOMS LAWS NEED TWEAKING
-------------------------------------

6. (SBU) Not only does Chajai consider government involvement key to
anti-counterfeit efforts, but he also feels that existing laws need
to be tweaked. Despite amendments to make Morocco's Industrial
Property Law comply with the Intellectual Property Provisions of the
U.S.-Morocco Free Trade Agreement (FTA), companies see practical
difficulties in effectively implementing the provisions. Under the
new law (31-05), implemented last year, a company has two months to
register opposition to a trademark application. This puts the burden
squarely on the private sector and legitimate trademark holders to
protect their brands proactively. Furthermore, Chajai says it
typically takes six months of haggling after a complaint is filed
before OMPIC issues a recommendation. Going to a commercial court
for a decision can take up to eighteen months. Such long lag times
enable counterfeiters to continue producing and distributing fake
goods to the detriment of the legitimate producer.

7. (SBU) Chajai also takes issue with the fact that counterfeiting is
not a customs offense punishable by fines. As with trademarks, the
onus is on private companies to alert customs to the possibility of
an incoming counterfeit shipment. Customs then requires the alerting
company to accept liability for any seized goods and associated
indemnities. Such a system essentially makes companies pay to track
and intercept fake goods, a pursuit that many may not be able to
afford. Indeed, Chajai contends that most companies are aware that
counterfeiting is a problem, but either do not know what to do about
it or are not willing to put up the money to fight it.

8. (SBU) The current system for initiating seizures is problematic
for other reasons as well, in Chagai's view. Companies must alert
customs of an incoming counterfeit shipment in enough time to have
them act. This can be challenging if they themselves are given
little notice. Recently, customs failed to seize part of a shipment
of All Well's, a counterfeit version of P and G's Always brand,
claiming they did not receive P and G's request in time. In
addition, it is important, if at all possible, for customs to
intercept all parts of counterfeit shipments, since the profit margin
on fake goods is often so high that counterfeiters stand to make a
lot of money even if not all their shipments get through. (To cite
an example, a seven-pack of All Well's costs two cents to produce and
sells for eighty cents, while genuine Always costs thirty-five cents
to produce and sells for a dollar twenty per package). As Chajai
sees it, if customs officials were taught to detect fake products and
could impose steep fines on counterfeiters, they would have greater
incentive to stop illegal shipments on their own.

9. (C) COMMENT: While progress has been made in curbing
counterfeiting and protecting Intellectual Property Rights (IPR) in
Morocco, with improved Customs enforcement and trademark
registration, CBPC's experience shows that work remains to be done to
ensure that Morocco's legislation is effectively implemented. ConGen
and Embassy are working jointly to support the group and to ensure
its concerns are considered and addressed by relevant Ministries.
END COMMENT.

GREENE

 
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